Despite being “old” in technology-years, Bitcoin is still relatively new. While it has revolutionized the way many look at currency, and brought a lot of positive changes to the fore, there are still many drawbacks to the way it's set up. That's why Dash was created, as a way to resolve the issues of privacy, speed of transactions, and governance, as they are presented by the Bitcoin blockchain and network.

Dash is also intended to make crypto more useful in the everyday sense. Bitcoin's often slow transfer speeds make it difficult to use for daily purchases, and its fees make it so that people are loath to use it for smaller purchases.

Can Dash offer solutions to these problems, and more? Read out helpful guide to find out.

The History of Dash

Dash literally grew out of the Bitcoin codebase, a fork that was developed by a separate team, though very close to Bitcoin in terms of how it was structured. While it was initially associated with “dark” marketplaces and transactions – its name “DarkCoin” didn't help – they eventually decided to change its name to “Dash,” which combines digital and cash.

The coin's development really got going with the creation of the unique two-tiered structure that helped solve the issues of user privacy and slow transaction speeds. They further went on to try and implement a new governance model that allows for more user-driven, democratic platform development.

The Two-Tiered Structure

How exactly does this innovative two-tiered structure work?

The first tier of this structure has to do with mining. Miners on the Dash platform perform calculations that solve complex math problems, after which new blocks are created and they are rewarded with crypto – the standard proof-of-work method. Unlike Bitcoin, however, Dash only rewards them with 45% of the block's reward. But why? We'll see soon.

The second tier is for masternodes, servers run by users with lots of processing power at their disposal. These servers process payments, coin mixing, and can vote on governance. For doing these transactions, the masternodes get another 45% of block rewards. Since you need a minimum of 1000 DASH to set up a masternode, it prevents scammers and hackers from falsely setting up large numbers of accounts in order to influence the platform.

How Masternodes Help

One of the main features of Dash is the InstantSend function, allowing instantaneous transaction verifications. However, it still takes 2 ½ minutes to verify a block on the chain, and since a transaction can't be “approved” until there's a new block recording it, how do you get a transaction approved instantly? The masternodes.

Users send their transactions masternodes that “lock” them down. These nodes guarantee that the money is there to be transferred, so the transaction is instantly verified and approved. Later when the new block is being generated, the node sends it the record of the transaction, and it's just as if the user waited the whole 2 ½ minutes.

Anonymity Via Coin Mixing

Coin mixing mixes up the trail of funds being spent, making it so that people can't trace a coin or its use back to its source. Unfortunately if you want this sort of service with Bitcoin, you need a third-party app to do it. Dash, on the other hand, includes this function.

It's called PrivateSend, and it works like this: you choose who to send your funds privately to, you send the transaction to the masternode, the masternode mixes your coins with other coins from other private transactions going on at the same time, and so on and so on until the coins that end up with the recipient aren't the same ones you sent out.

By doing this, no one can find out who you are by the trail of the currency. While Dash's network technically does have some records of it, it's not much of a worry, and in the end it offers much more anonymity than other platforms.

The Decentralized Way to Govern

So 45% of the block reward goes to the miners, and 45% goes to the masternodes. Where does the other 10% go? The answer: marketing, development, and maintaining Dash's infrastructure.

Dash implements a decentralized governance system as a way to solve the problem of fragmentation: whenever the Bitcoin community has had a disagreement on something, the result has generally been a split (or hard fork) off the main codebase and the development of a new coin altogether (Litecoin, Bitcoin Cash, etc).

Dash wants to prevent that from happening with their governance model. In Dash, new features or developments can be proposed by anyone, and these are then voted on by masternodes. The rules require a vast majority consensus for a measure to pass.

Resolutions that pass receive part of that extra 10% of the block reward.

Dash Evolution

What's new with Dash? They've unveiled a plan for something call Dash Evolution, a development in their plan to make payments more instantaneous. But interacting with the blockchain takes time and effort, and isn't very user-friendly. Many blockchain currencies' reliance on users being savvy with the platform makes it so that few can fully utilize their features.

Dash Evolution is going to be an easy-to-use interface and app that will simplify crypto transactions and make them comprehensible and quick for everyone, allowing people to send and receive money without having to go into the technical side of the platform.

Dash vs Monero

Both of these are blockchain-based cryptocurrencies. They both focus on privacy and security, giving users anonymity in their transactions. Dash uses coin mixing to achieve this, while Monero uses ring signatures. Both offer ways to mine their currencies. Dash is based on Bitcoin, while Monero is based on CryptoNote. Dash's block creation time is 2 ½ minutes, while Monero's is only 2. Neither have been fully-developed, but it looks like Monero is a little further ahead, although Dash seems to have more of a focus on usability than Monero, which seems like it's mostly focused on privacy and anonymity.

Dash vs Litecoin

These platforms both have an emphasis on quick transactions using cryptocurrency, and both also put an emphasis on democracy and decentralization. Both of these platforms are also open-source and are very community-driven. Both have their own coins which can be mined. Dash doesn't have its own app yet, while Litecoin has a wallet for Android and Blackberry. Dash seems to put more of an emphasis on security and anonymity, while Litecoin's main focus is ease-of-use.

Dash vs Bitcoin

These are very different, despite having the same origin. Dash is a currency that split off from Bitcoin, due to creative differences among some of the community. Dash has a “masternode” system that allows for quick processing and verification of transactions without depending immediately on the blockchain processing times, while Bitcoin doesn't have such a system. Dash also keeps users' transaction histories private with its coin mixing feature, while Bitcoin transactions are easily-viewable by anyone with a mind to look. Both are open-source, but Dash is more decentralized, letting users guide the development of the platform.

Frequently Asked Questions

Is Dash a cryptocurrency?
Yes, it's a cryptocurrency based on Bitcoin's codebase.

What's the Dash cryptocurrency price?
Last we checked, DASH had a price of around $667.52.

Is there a Dash app?
Not yet, but there's one in the works called Dash Evolution.

Is Dash on Reddit?
Yes, there's a community for it there.

Where can I read about Dash coin news?
On Reddit, Twitter, and crypto blogs.

What's the rate of Dash coin to USD?
$667.52 to 1 DASH, last we knew.

How does Dash perform vs Bitcoin?
Check out the section above for our comparison of the two.

What's the price prediction of Dash?
Its price could go up with the release of Dash Evolution, or plummet with Bitcoin.

Does Dash have a Twitter?Yes.

What is Dash?
It's a decentralized cryptocurrency platform that emphasizes high transaction speeds and user privacy.

What's the future of Dash coin?That'll depend on the developers' marketing, Bitcoin's performance, and new developments.

How does Dash perform vs Ethereum?
They're quite different, but off the cuff, we'd say that Ethereum is more powerful and feature-rich right now, but Dash could end up being more secure and private than Ethereum.

Do you know how to buy Dash with Coinbase?
It doesn't look like you can get it there.

Can I buy Dash with USD?Yes, at Bitfinex and Kraken (among others).

Can I buy Dash with Bitcoin?Yes, at HitBTC (among others).

Conclusion

The good thing about cryptocurrency is that, no matter what your skill level or your preferences are, there's probably a coin for you. For those who want both ease-of-use and privacy via anonymized transaction protocols, Dash looks like it's shaping up to be a serious contender in the future. While we're still waiting for it to roll out its Dash Evolution API and app, there's lots to consider as they continue development. It's not cheap to buy in – one DASH is almost $700 last we checked – but depending on how they market themselves and how well Bitcoin does, there's a chance Dash could be a worthy investment in 2018.

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Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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